India: The German luxury automaker joins Ford Motor Co. in tapping India as a source for U.S. vehicles, underscoring the subcontinent’s rapid ascent as an auto export hub. This transition will have a positive impact on the overall automobile industry in the long run.
Ford started importing its EcoSport subcompact crossover from Chennai last year. General Motors dissatisfied with its exertions to grow an Indian sales base, and has changed its Indian auto making capacity into an export base. The abrupt arrival of vehicles from India arises as U.S.-Chinese trade relations toss over retributory tariffs on vehicles and auto parts. It mostly takes place because the Indian domestic market is struggling and the Indian factories are tackled with congestion. “The SUV GLC is in great demand worldwide,” Mercedes-Benz USA spokesman Rob Moran said. “Therefore, Mercedes-Benz uses the capacities of its global production network on four continents. This also includes the Mercedes-Benz plant in Pune.” In U.S, GLC is the highest-selling luxury compact crossover and the top-selling model across Mercedes’ brand lineup. GLCs sold in the U.S. are presently manufactured in Bremen, Germany.
According to the industry insights of BlueWeave Consulting, India will be playing a bigger role now. Mercedes’ move could turn the limelight on its auto engineering prospective. It will support in forming supply chain and production groundwork that can encounter North American and European quality criteria. This is an effort to learn about India as an export hub. India’s auto sector has substantial growth prospect as middle-class incomes increasing and consumers are settling from two-wheelers to cars. Moreover, there could be more capacity development for light vehicle in India. Exports could become a vital part for automakers with Indian plants. If production capacity is not sufficient enough to be sustained with domestic demand, it’s better to shift that capacity to exports. Exporting numerous GLCs will be useful for the success of the Mercedes’ Pune plant while meeting the increasing vehicle demand of U.S. market. The charge of shipping GLCs stateside from Pune is greater than from Bremen, but the overall finances are alleviated by other costs coupled with lower labor rates in India. The industry is witnessing growing uncertainty regarding U.S.-imposed import tariffs. The U.S. government has issued a 25 percent tax on cars that are being imported in U.S. from the European Union. This import tariff imposition will have a positive impact on the automobile industry especially on Asian countries like India, which will propel as an auto export hub in the years to come.